What’s shaping markets this week? Policy-setting meetings by the Federal Reserve and the Bank of Japan, initial releases of GDP data from the U.K. and the U.S., and the key U.S. employment report. Here’s the full rundown of the biggest worldwide macroeconomic events.

A strong shekel puts the pressure on the Israeli central bank to trim interest rates again after cutting them back in February. But with rates already at just 0.75%, there’s not huge scope for further reductions. (AM)

Decent export gains in February, which posted a record high in absolute terms, were a welcome sign and could indicate that the U.S. recovery is paying off south of the border. But trade data at this time of year are volatile in Mexico and the record was only slightly above the previous record, posted in August. In the months between those dates, overseas sales growth has been sluggish. As year-end volatility is removed, we could see a reversion to that soft trend in March. (MC)

With mortgage applications coming in their lowest level in 14 years last quarter — a plunge that was prompted by rising interest rates — there can’t be much hope for indicators such as this one. What hope there is revolves around the notion that the pullback in mortgages is a temporary phenomenon and that other factors such as job growth , higher wages, and pent-up demand for housing will in the coming quarters drive another recovery in both home loans and home purchases. (MC)

Euro zone money supply is barely growing. What’s more, the latest set of data is likely to show further contraction in lending to the private sector–most of the reduction is to small and medium sized firms. The European Central Bank is desperate to get credit flowing again. Little wonder it is considering another long-term refinancing operation. (AM)

U.K.: 4:30 a.m. EST (9:30 a.m., London)
–1Q GDP first estimate [Expected up 0.9% on the previous quarter and up 3.2% on the year vs. up 0.7% and up 2.7% respectively in 3Q 2013]
–February services output {Expected up 0.2% on the month vs. up 0.4% on the month in January]

The U.K. had a strong first quarter–manufacturing, services and construction boomed. The primary driver has been the property market, boosted by rocketing prices. Consumers are spending more too. To sustain that real wages will have to start growing too. (AM)

Sentiment is picking up in the euro zone, thanks to signs of recovery across its most beaten up economies and a German upswing. One worry is what’s happening to France, which has become the single currency region’s big laggard. (AM)

GERMANY: 8 a.m. EST (2 p.m., Berlin) April preliminary consumer price index [Expected down 0.1% on the month and up 1.4% on the year vs. up 0.3% and up 1.0% respectively in March]

For an economy that’s growing solidly and is running near capacity, Germany’s low consumer prices are a puzzle and a worry. Any signs of an uptick will be welcome for the ECB, which is increasingly facing deflation across the single currency’s other economies. (AM)

Again, the problem is a drop in mortgage applications last quarter. It’s likely to result in a continuation in this trend, where home prices continue to show gains on a year-on-year basis but are stagnating on a month-by-month basis. (MC)

Mr. Lew had to cancel Congressional appearances last month and earlier this month because of prostate surgery. In that interim period, Senate Democrats bowed to House pressure to strip language from a bill providing aid to the Ukraine that would have provided more U.S. money to the IMF and would have ratified key reforms to the Fund’s governance that have been delayed by U.S. opposition. That deal means the heat is off Lew on that topic at least, but it also means the emerging\-market countries that have pushed for greater and deserved representation at the Fund are again left out in the cold by Washington. (MC)

Most measures of confidence suggest that consumers haven’t been too rattled by some of the bad news of recent months – a volatile stock market, tensions in Ukraine, a slowdown in economic activity caused by cold weather. Forecasts for this indicator hint at the same. That’s an encouraging sign. (MC)

South Korea’s economy grew at its fastest pace in three years in the first quarter of the year, so March industrial production is likely to come in quite a bit stronger than February’s weak reading – which was probably distorted by the Lunar New Year holiday that routinely dampens demand across Asia. The Korean economy appears to be accelerating overall driven by recovering demand in the West, upping the odds that the central bank will raise rates later this year. (MA)

The weak February reading on Japan’s industrial production was attributed to a number of factors, including harsh winter weather and a rebound from January’s strong reading. Still, suspicions linger that the impending April 1 sales-tax increase also weighed on demand. March data will help confirm whether Japanese manufacturing is seeing real weakness or whether February’s stumble was indeed due to evanescent factors. (MA)

Improving exports and domestic consumption both likely contributed to stronger GDP growth in the first quarter in Taiwan, considered one of Asia’s bellwether economies due to its exposure to the global electronics cycle. With unemployment expected to fall and inflation still at low levels, the arrow is pointing up for Taiwan’s economy this year. (MA)

April is one of the few months that the Bank of Japan meets twice, but just as it took no action at its early-April meeting, the central bank is expected to keep both interest rates and its quantitative easing program steady at this one-day meeting. More important will be the BOJ’s semi-annual outlook report: Key messages on the growth outlook are likely to stay unchanged, but Japan-watchers will parse the text carefully for clues to whether the BOJ is likely to further ease monetary policy later this year. (MA)

German retail sales are expected to pull back in March after a strong start to the year. But there are growing signs domestic demand is strengthening. (AM)

FRANCE: 2:45 a.m. EST (8:45 a.m., Paris) March household consumption [Expected up 0.2% on the month and down 1.0% on the year vs. up 0.1% and down 0.3% respectively in February]

France is in the doldrums. The year-on-year weakness in consumption is symptomatic of how the economy is only just treading water. (AM)

SPAIN: 3 a.m. EST (9 a.m., Madrid)
–1Q preliminary GDP [Expected up 0.5% on the previous quarter and down 0.2% on the year vs. down 0.2% and up 0.5% respectively in 4Q 2013]
–April consumer price inflation [Expected up 0.3% on the year vs. down 0.2% in March]

Spain probably grew a moderate amount on a quarterly basis during the first three months of the year. Nothing spectacular, but a start. What’ll be worrying policymakers, however, is the country’s very low inflation rate. Deflation remains a substantial risk. (AM)

The German economy is performing well. Employment continues to pick up and the country is probably near full employment. What policymakers will be looking for now are signs of a significant pickup in wages. Something that hasn’t been evident so far. (AM)

EURO ZONE: 5 a.m. EST (11 a.m. Brussels) April consumer price inflation [Expected up 0.8% on the year vs. up 0.5% in March]

The euro zone is flirting with deflation. The European Central Bank is increasingly worried by persistently low inflation. And pickup from March’s levels would be very welcome. (AM)

The ADP numbers, which are crafted out of the payroll processor’s heavy database of employer records and come up with a proxy estimate of the Bureau of Labor Statistic’s monthly payroll estimate, have come in for some criticism of late. The report had proven to be less predictive than its authors claim it to be. But last month, ADP’s number was virtually spot on. People will still trade on it as an early read of what will come out from the government on Friday. (MC)

The consensus GDP estimate is alarmingly low but that’s largely due to the unseasonably cold conditions in January and February, which paralyzed industries such as construction and tended to keep shoppers away from stores. March numbers suggest there was an improvement toward the end of the quarter, and this momentum could have continued into the second quarter, but for now the winter effect will weigh on the first quarter numbers. (MC)

There have been signs of a pickup in wages in the monthly employment numbers and that’s got one or two economists speculating that the Federal Reserve will at some point have to concern itself with the risk of wage inflation. But it’s not yet properly showing up in this closely watched indicator of total employment costs. That’s because employers have been offsetting wage increases with cuts in benefits such as health care. At some point, and it could show up in the first-quarter numbers, that effect is expected to wear off. Coupled with upbeat expectations for Friday’s jobs report, this effect could start to be a feature in the Fed’s thinking. Once they start to communicate that, the impact on markets will be profound. (MC)

The FOMC is widely expected to stick with the program and cut another $10 billion from its monthly bond-buying commitments. And with no press conference from Chairwoman Janet Yellen, information could be thin on the ground. The Fed wasn’t happy with the market’s nervous response to comments Ms. Yellen made at the last meeting, which at that time prompted investors to bring forward their estimates for when the Fed might start hiking rates. So, the FOMC members are likely to avoid rocking the boat. Nonetheless, questions being asked about a modest upswing in wages should be addressed in the meeting. Just don’t expect details of that discussion to be published with much oomph – for the reasons described above. (MC)

Exports and imports both showed solid growth in March as a series of one-off factors early in the year (Lunar New Year, U.S. winter weather) have passed and the strength of underlying demand in the West begins to feed through to this key Asian exporter. A strong showing is expected, but the key to just how strong will be whether China’s slowing growth outweighs the improving picture from the U.S. (MA)

China’s official gauge of manufacturing activity ticked up slightly in March from 50.2 in February, breaking a three-month fall. A preliminary April reading on a competing measure from HSBC showed improvement, although the HSBC index focuses more on small and medium-sized enterprises. Most data out of China has indicated sluggish activity in the first quarter of the year, so it would be a stretch to expect a strong reading on the official April PMI. (MA)

Bank Indonesia’s policy tightening since last summer’s taper tantrum has been aimed at getting inflation under control and reining in the current-account deficit. So far it has been making solid progress on both counts, and that should continue in the March numbers. The key will be whether Indonesia’s commodities exports can hold up later in the year if China’s growth continues to slow. (MA)

British business is doing well, especially where it’s linked to the property market. Mortgage approvals are climbing and credit is growing again. Before long, the Bank of England will have to start thinking about how to normalize interest rates without derailing the expansion, but not moving so slowly that inflation takes off. (AM)

Ms. Yellen won’t have gotten a chance to express her views at a press conference after the FOMC meeting on Wednesday. So this is her opportunity to get her message across. Expect it to be carefully measured, as always. Fed policy is approaching an important inflexion point, where the next phase once the bond-buying program is eliminated will be to think about the timing of a hike in interest rates. She’s not going to rush into signaling that but may feel compelled to address it in some way. (MC)

Other economic data suggest that consumers spent more in March after a sluggish February. Economists are looking for a bounce in the spending numbers. (MC)

– Unemployment insurance weekly claims report. [Initial claims expected 320,000 vs. 329,000 week prior.]
Last week’s number was a disappointment after a string of very low jobless claims reports. Was it an anomaly or was the prior drop in claims the aberration? (MC)

U.S.: 9 a.m. Markit Economics April manufacturing PMI.

The preliminary ”flash” version of this indicator showed it slipping slightly to 55.4 from 55.5 in March. But in overall terms, that readout is relatively strong. (MC)

CANADA: 9:30 a.m. Markit Economics April manufacturing PMI

Other indicators show a modest improvement in Canada’s economic output during the first quarter. This will be an early means of gauging whether that continued into the fourth quarter. (MC)

As with the Markit PMI, the ISM index was indicating decent enough strength in the economy in March. This is an early chance to gauge whether that momentum carried through into the second quarter. (MC)

Weakness in China and sluggish demand from the West has kept Asia’s manufacturing PMIs bouncing up and down on a monthly basis, but most of them showed improvement in March and that trend is likely to continue in April as the recovery in the West gathers pace. With the exception of Taiwan, however, few countries’ PMIs are indicating solid expansion. (MA)

India’s manufacturing PMI was one of the few to show a significant deterioration in March, though it remained in expansionary territory above 50. Weak readings on industrial production and exports don’t augur well for the April PMI. Until authorities manage to break the back of inflation and are able to loosen policy, India’s growth rate will probably remain well below its long-term average. (MA)

The European Central Bank is battling excessively low inflation rates and excessively high unemployment. The obvious solution is to provide more economic stimulus, though it’s far from obvious the ECB has the will or capacity to provide it. (AM)

This is the highest consensus estimate from our survey since 2010, when demand for workers was boosted by hiring for the Census. So that’s a good sign that economists are more optimistic about the outlook for jobs after six years of weak data. (MC)

Last month’s Markit PMI showed economic activity in Brazil’s manufacturing sector barely in the 50-plus expansion territory. This economy badly needs to see some growth, but that’s difficult with the central bank forced to keep interest rates above 11% to fight inflation. There’s not much hope that April the month that the economy pulled itself out of the doldrums. Brazil may have to wait for the start of the World Cup in June for the economy to gain some traction. (MC)